Sunday, 15 September 2013

In his rush to warn us of the "danger of the debate about Britain's place in Europe... being hijacked by extremes", Lord Wolfson neglects the possibility of remaining in the Single Market via membership of the European Free Trade Association (EFTA).

This so-called "Norway option" would protect our competitiveness, exports and jobs. Contrary to assertions made elsewhere, it would give us a considerable degree of control over the formulation of trading regulations, despite losing our vote in the EU Council.

In relations between EFTA and the EU, the are multiple opportunities for consultation and negotiation on new rules. As one Norwegian politician recently told me, the politics is done long before a vote is taken.

Most SIngle Market measures are in any case approved by Council without a vote (on the so-called A-List) while Britain within the EU is easily overruled under the Qualified Majority System (QMV).

Outside the EU, Britain can enjoy the fruits of globalisation, not least among them the fact that an increasing number of trading regulations are made at a global level, and handed down to the EU for implementation.

Ironically, Norway is fully represented on these bodies, with influence equal to that of the EU, alongside which it sits. Britain's voice, as one of 28 countries represented by the EU which negotiates a "common position" is often drowned.

To cut a long story short, let us assume that free trade is A Good Thing (I accept that there are those who think it is A Bad Thing). If the EU were a Single Market but every other country ran a protectionist system, then as far as free trade is concerned, we'd clearly be Better Off In.

But the world is now divided up into ever-larger free trade blocs, like EU/EFTA, NAFTA, Mercosur, ASEAN/AFTA, COMESA, and they are all under the WTO/GATT umbrella and are merrily signing free trade agreements with each other. And the EU itself has plenty of free trade/preferential agreements surrounding countries.

To give an example, the UK itself has always been a mini-free trade area, so let's assume Scotland vote for independence and Westminster says "Right, in that case we are going to put limits or tariffs on trade between Scotland and the rest of the UK, ha ha, that's you buggered", then all Scotland has to do is join the next larger bloc (let's say the EU or EFTA) and it is still better off.

So all a country leaving the EU has to do is to join whichever is the next larger bloc, let's say EFTA, and if EFTA won't have you, then you are still in the WTO/GATT system, and if they won't have you as a full member, then it can't be too difficult to haggle a free-trade agreement with them on a unilateral basis, which then applies to all countries who are members etc.